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Income TAX Authorities.W

Taxation of corporation (Presidency University India)

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INCOME TAX AUTHORITIES

(I) ASSESSING OFFICER [SECTION 2(7A)

It means the Assistant Commissioner/Deputy Commissioner (DCIT) OR the income tax

officer who is vested with relevant jurisdiction u/s 120 (l) or 120 (2) or any other provisions
of this Act. It also includes the Additional Commissioner/Additional Director/Joint
Commissioner/Joint Director Commissioner who is directed u/s 120 (4) (b) of this Act to act
as Assessing Officer.

IMPORTANCE OF ASSESSING OFFICER

In the organizational set-up of the income tax department Assessing Officer plays a very vital
role. He is the primary authority who initiates the proceedings and is directly connected with
the public. For the time of filing of return till the assessment is completed he plays a pivotal
role He can start proceedings for non-filing of return, imposition of penalties etc. Orders
passed by him can be challenged only on appeal. The department can revise his orders only if
it is proved that these are prejudicial to the revenue and that too only by the Commissioner of
Income tax.

APPOINTMENT OF INCOME-TAX AUTHORITIES [SECTION 117]

a) Power of Central Government. The Central Government may appoint such persons as it
thinks fit to be income-tax authorities. It kept with itself the powers to appoint authorities up
to and above the rank of an Assistant Commissioner of Income-tax [Section 117 (1)].

b) Powers of the Board and other higher authorities. Subject to rules and regulations of the
Central Govt. regarding the conditions of service of persons in public services, the Central
Govt. has authorized the Board, or a Director General, a Chief Commissioner, a
commissioner, or a director to appoint income-tax authorities below the rank of Assistant
Commissioner. [Section 117 (2)].

c) Powers to appoint executive and ministerial staff. U/s 117 (3) the Board has been
empowered to appoint such executive or ministerial staff as may be necessary to assist the
income tax authorities in the execution of their functions.

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CONTROL OF INCOME-TAX AUTHORITIES [SECTION 118]

The income-tax authorities will be subordinate to such authorities as may be prescribed
in a notification to be issued by the Board in this behalf.

1. CENTRAL BOARD OF DIRECT TAXES (C.B.D.T.)

In the administrative set up of the Income-tax department highest authority is the Central
Board of Direct Taxes, constituted under the provisions of Central Board of Revenue Act,
1963. The Board functions under the control of Ministry of Finance, Government of India. Its
jurisdiction is whole Of India.
The Central Government is empowered to appoint its members and the Government can
increase the number up to a maximum of five. At present there are four members besides the
Chairman. One of the members of the Board is appointed as its chairman.

Powers of C.B.D.T.

The whole of income-tax department is to be looked after by the Board. It must perform
the functions of administration, supervision and control of entire Income-tax structure in India.
The orders and directions issued by the Board are to be complied with by all the subordinate
authorities
• The orders and directions issued by the Board will not interfere in the performance of
appellate functions Of Appellate Commissioner.
The Income-tax Act provides following specific powers to the Board:

i. The Board can declare any association whether incorporated or not and whether Indian' or
Non-Indian, as company under the provision of Section 2(17).

ii. The Board has power to determine the jurisdiction of various authorities mentioned in this Act
[Section 118]

iii. The Board will be empowered to issue directions or instructions in respect of levy of penalty
under section 271C or 27 1CA for failure to deduct or collect tax at source [119(2)(a)

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iv. The Board may issue directions for the exercise of powers and performance of the functions
by all or any of these authorities. While issuing such directions the Board will keep in mind
any of the following criteria:
i. Territorial Area,
ii. persons or classes of persons,
iii. incomes or classes of incomes; and
iv. cases or classes of cases. [Section 120 (l) and (3)].

v. The Board may authorize, by general or specific order, Director General or Director to
perform the powers of any of the income-tax authorities. [Section 120]
vi. The Board may empower Director General or Chief Commissioner or Commissioner to
authorise Deputy Commissioner or Deputy Director to exercise the powers of assessing
authority in respect of any specified area, person, incomes or cases or class of persons, class
of incomes or class of cases. [Section 120 (4)].
vii.The Board may authorize any of the authorities to exercise its powers concurrently with any
other authority. In case such notification is issued by the Board, the lower authority (in rank)
shall exercise such powers as are directed to it by higher authority. [Section 120 (5)]
viii.To carry out the different provisions of the Act the Board makes rules for whole of India.
[Section 295].
ix.The Central Board of Direct Taxes has been empowered by Taxation Laws (Amendment) Act
1975 to make rules regarding the maintenance of accounts and documents required under
Section 44 AA. It is obligatory for professionals to maintain such books and documents as
may enable the Assessing Officer to compute his total income.
The Board has the power to make rules and issue orders, instructions, directions etc., to all
the persons employed for the proper and efficient administration of the Act, but the Board
cannot issue orders, directions etc. of the following nature:
a. To require any income-tax authority to make a particular assessment or to dispose of a
particular case in a particular manner.
b. To interfere with the discretion of the Deputy Commissioner of Income-tar (Appeals) in the
exercise of his appellate functions. Sirpur Paper Mill Ltd. v. CWT 77 ITR 6 (SC) and J.L.
Synthetics Ltd. V. CBDT 83 IT'R 335 (SC).

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x. Section 119 (2) empowers the Board to issue general or special circulars or orders which are
not prejudicial to assessees and Board feels that these are necessary or expedient for the
Purpose or proper and efficient management of the work of assessment and collection of
revenue. Section 119(2)(b) says that to avoid genuine hardship in any case or class of cases,
the Board, if it thinks desirable can authorize any income-tax authority not being a Deputy
commissioner (Appeal) or Commissioner (Appeals) or to admit an application or claim for
any exemption, deduction, refund or any relief under this Act after the expiry of specified
Period fixed for such an application, claim etc. The Supreme Court has also held the validity
and binding nature of such type of circulars which are beneficial to the assessee and the
taxpayer has right to get them enforced in a court. (Navnital Javeri v. Sen, 56 ITR 198,203).
If any circular beneficial to the assessee is subsequently withdrawn, such a withdrawal
cannot affect the validity of the action already taken pursuant to it. (Tata Iron Steel Co. v.
Upadhaya, 96 ITR 115).
xi. To avoid undue hardship in any case or class of cases, the Board may relax any of the
requirements given under the chapters of Aggregation. chapters Such of relaxation
Aggregation, carry forward and set off losses or Deduction u/s 80 of the Act. Such relaxation
must be provided in general or special order to be issued by the board for reason to be specified
therein. Such relaxation may relate to failure of the assessee to comply with any of the
requirements regarding claim of deduction subject to following conditions:

a. The default of the assessee was due to circumstances beyond the control of assessee;
and
b. Assessee has complied with such requirements before the completion of assessment is
relation to the previous year in which such deduction is claimed. However, each such order is
to be placed before each house of parliament.

(xii) The Board shall adopt and declare a Taxpayer's Charter and issue such orders,
instructions, directions, or guidelines to other income-tax authorities as it may deem fit for the
administration of such Charter. [Section 119A]

2. PRINCIPAL DIRECTOR GENERAL/PRINCIPAL CHIEF

COMMISSIONER/DIRECTOR GENERAL/CHIEF COMMISSIONER OF INCOME-
TAX

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Appointment. The Central Government may appoint such persons as it thinks fit to be the
Principal Director General/Principal Chief Commissioner/Director General/Chief
Commissioner of Income-tax.
Jurisdiction. The jurisdiction of these authorities shall be determined by the C.B.D.T. keeping
in view the area, persons, incomes, or cases.
Function. The C.B.D.T. may by general or special order and subject to such conditions,
restrictions, or limitations, authorize any Principal Director General/Principal Chief
Commissioner/ Director or Chief Commissioner to perform such functions of any other
income-tax authority as may be assigned to him in such order.

Powers
a) The Principal Director General/Principal Chief Commissioner Director/General or Chief
Commissioner may be empowered to authorize a Deputy Commissioner to exercise the
powers of an Assessing Officer in respect of a person, case, income, or an area.

b) These authorities may be empowered by the Board to appoint income-tax authorities below
the rank of an Assistant Commissioner.

c) These authorities may, after giving the assessee a reasonable opportunity of being heard in the
matter, and after recording his reasons, transfer the case from one Assessing Officer
subordinate to him.

d) The Director General or Director or any other officer so authorized, may exercise the powers
of Assessing Officer, in case he has reason to suspect that any income has been concealed or
is likely to be concealed by an assessee coming within his jurisdiction.

e) Section 119 (3) empowers the Director to issue instructions to the Assessing Officers and such
instructions are issued for their guidance and are binding on them.

f) Taxation Laws (Amendment) Act, 1975 has given the power to the Director to make any
inquiry or investigation in case of such type of assessees who falls within his jurisdiction and
in whose case, he has reason to suspect that any income has been concealed or is likely to be
concealed. This section also confers on the Director such powers which are vested in a court
under the Code of Civil Procedure, 1908.

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g) The Director shall be competent to make any inquiry under this Act and for this purpose shall
have all the powers that an Assessing Officer has under this Act in relation to the making of
inquiries. [Section 135].

3.PRINCIPAL DIRECTOR OR PRINCIPAL

COMMISSIONER/COMMISSIONER/ DIRECTORS/ADDITIONAL COMMISSIONER/
ADDITIONAL DIRECTORS OF INCOME-TAX

(i) Appointment. The Central Government may appoint such persons as it thinks fit to be
the commissioners of Income-tax.
ii.Jurisdiction. The jurisdiction of Commissioners is to be determined by the Central Board of
Direct Taxes keeping in view the area, persons, incomes, or cases.
iii. Functions. The Board may, by general or specific order and subject to such conditions,
restrictions, or limitations, authorize any commissioner to perform such functions of any other
income authority as may be assigned to him in such order.
iv.Powers
a. Under the directions of the Board, a commissioner may exercise the powers of an Assessing
Officer.
b. A Commissioner has the power to transfer any case from one or more Assessing
Officers subordinate to him to any other Assessing Officer or Officers also subordinate to him.
He can do so only after giving the assessee an opportunity of being heard and after recording
the reasons for doing so.
c. The Commissioner has been empowered to grant approval for an order issued by the
Assessing Officer asking a non-company assessee to get its accounts audited from a Chartered
Accountant. [Section 142 (2A)].
d. The prior approval of the Commissioner is required for reopening of an assessment
[Section 147] beyond the time limit of 4 years.
e. The Commissioner has the power to revise an order passed by Assessing Officer, if in
his opinion it is erroneous or prejudicial to the interests of the revenue. He can do so only after
giving the assessee an opportunity of being heard. [Section 263].
f. The Commission has the power to revise any other order issued by I.T.O. and not
covered under section 263, either of his own motion or on application by the assessee for such
revision. [Section 264].

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g. The Commissioner may direct the Assessing Officer to appeal to Appellate Tribunal
against the order passed by Commissioner (Appeals). [Section 253 (2)].
4. JOINT COMMISSIONERS/JOINT DIRECTORS OF INCOME-TAX
I. Appointment. The Central Govt. appoints Joint Commissioners/Joint Directors of Income tax,
and they are subordinate to Commissioners, and Chief Commissioners.
II. Jurisdiction. The area of operation is specified by the Board or any other authority so
authorized. Their jurisdiction can be concurrent with other such authorities.

III. Functions. They perform such functions as are assigned to them by general or specific order
Issued by the Board and in respect of specific area, class of persons or specific cases or class
of cases. (iv) Powers
a. He is empowered to accord sanction to levy additional income-tax on companies in
which public are not substantially interested. [Section 107].
b. He may be authorized by the Board, or Chief Commissioner to exercise the powers of
assessing officer.
c. He has the power to cancel the registration of a firm which is not a genuine firm.
Section 186 (1)].
d. He has the power to issue instructions to Assessing Officer to revise an Older issued
by if he has received an application from assessee regarding a pending case. [See. 144A].
The Finance Act 2017 has authorized the Joint Director. Deputy Director or the Assistant
Director to call for information for the purpose of any inquiry without seeking approval of the
higher authority.

5.ASSESSING OFFICER (DEPUTYCOMMISSIONER/ASSISTANT

COMMISSIONER/INCOME TAX OFFICER)

Jurisdiction [Section 124]

1. Determination by CBDT. jurisdiction of income-tax authorities shall be determined by the
Central Board of Direct taxes. While determining the jurisdiction the Board may consider the
following
(i) Territorial area, (ii) Persons or classes of persons, (iii) Incomes or classes of incomes,
(iv) Cases or classes of cases.

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2. Instructions by Director General/Chief Commissioner or Commissioner of Income tax

The Assessing Officer shall perform his functions in respect of such area or such classes of
Persons or incomes as the above-mentioned authorities may instruct. The Assessing Officer
shall have jurisdiction within the area assigned to him and in respect of:
(i) Any persons who is carrying on his business or profession in such area, or if he is
carrying on business at more than one place, the principal place of business is situated within
such area: and
(ii) Any other persons who is residing in such area.

3. Concurrent Jurisdiction. If two or more persons are appointed as Assessing Officers in same
area, each one will perform such functions as are directed by the Commissioner. If two or
more Assessing Officers are required to attend the cases in same area, the directions of that
Assessing Officer who is senior in rank shall prevail.
4. Dispute Regarding Jurisdiction. (i) If there is dispute regarding the jurisdiction of an
Assessing Officer, it will be decided by the Director/Chief Commissioner or Commissioner
of Income-
I. If dispute relates to areas which fall within the jurisdiction of different such authorities,
it will be decided by the concerned Director General or Chief Commissioner or
Commissioner.
II. If such authorities are not in agreement the dispute will be decided by the Board or
any other authority so notified.
5. Jurisdiction not to be Disputed.
i. The jurisdiction of the Assessing Officer shall not be challenged after the expiry of one month
from the date on which he has filed a return u/s 139(1) or u/s 115WD (2); or after the
completion of assessment whichever is earlier.
ii. If he has not filed such return and the time allowed by notice served under sections 142(1) or
148 or 144 or u/s 115WD (2) or u/s 115WH(l) (first provision) has expired.
iii. If Assessing Officer is not satisfied about the contentions of the assessee regarding the dispute,
he will refer the case for decision to the Commissioner/Chief Commissioner or Direct tax
General of Income-tax.

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Powers
The Assessing Officer shall exercise the following powers:
1. Power of Civil Court.
2. Powers of Search and Seizure
3. Power of Assessment.
4. Power to call for information.
5. Power of Survey
6. Power to Inspect Registers of Companies

6. INCOME TAX INSPECTOR

They are appointed by Chief Commissioner or Commissioner of Income-tax and are
subordinate to Assessing Officers. They assist Assessing Officers in performance of their
duties. They may be directed to perform any other function by general or specific order.
All the proceedings under this Act conducted before an Income-tax authority shall be
deemed to be judicial proceedings within the meanings of Sections 193 and 228 and for the
purposes of Section 196 of the Indian Penal Code. [Section 136].

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